Thread by @shayshinecastle

Next we're talking: How to pay for the city's climate work. documents.bouldercolorado.gov/WebLink/DocVie…

The city currently has a few mechanisms for this:
CAP tax (on electricity use)
UOT (originally to fund the muni but now the partnership work with Xcel)
Plus the disposable bag fee, trash tax and some $$ from the Energy Impact Offset fund.

All told, it's about ~$4M per year. But the CAP is expiring next year, and the UOT repurposing/extension in 2025.

Plus, as staff continually notes, current spending is not enough to keep up the growing realities of climate change.

About $10-$15M would be needed to make all the "big moves" staff/the city have already ID'd.

That's things like weatherization and electrifications; low- or no-cost solar; transportation electrification; minimizing plastic use; urban forestry; increase carbon and water capture.

And Boulder's total social costs of carbon — an estimate from all environmental damage resulting from releasing carbon into the atmosphere — is $54.9-$68.7 million each year, according to staff estimates.

That's *much* higher than the unspecified "other" cities that staff is comparing Boulder to: $12-$33M

(Notes literally say comparison to other cities, but they don't say which.)

Not all that surprising, given what we know about income and emissions: Richer people consume more, and therefore have a larger carbon footprint.

The U.S. is a wealthy nation, globally speaking, and Boulder is an even wealthier place.

The city adopted a new climate strategy and goals last year
- 70% emissions reduction by 2030 (2018 baseline)
- Net-zero positive city by 2035
- Carbon positive city by 2040

boulderbeat.news/2021/06/12/bou…

aaaaand this one: boulderbeat.news/2021/06/05/bou…

One note about that $10-$15M annual figure to meet the city's climate goals... that is not necessarily NEW revenue. Staff acknowledges that many city dept may play a role in addressing climate change, and they each have their own budgets.

What staff is suggesting to fund climate work directly is a new climate tax, combining the existing CAP and UOT, both of which are limited in scope.

The proposal is for a $5M/year tax, which would be a 25% increase over what those current taxes bring in. That would primarily be levied on industrial consumers of energy.

For example,
The average residential consumer current pays $43/year through CAP ($27) and UOT ($16)

Under the new climate tax at the recommended level, they would pay $38 per home, on average, a 12% decrease

Commercial customers average $242 annually today ($86 in CAP and $156 in UOT)

Under the new tax: $375 on average, a 55% increase.

Industrial customers average $705 currently
($128 CAP, $577 UOT)

They would average $1,390 under proposed climate tax — a 97% increase

The argument for these adjustments are that residential customers are currently paying a disproportionate share relative to their emissions.

Brett KenCairn: "Tonight we're talking about just one aspect" of how to tackle Boulder's emissions. "There are other sources we're going to explore, bc there are other actors that need to contribute."

Speaking of the CAP tax, it was the first time a city taxed its electricity use to fight climate change. It was passed in 2006 to help meet Kyoto Protocols, which for Boulder was a 7% emissions reduction.

16 years later, we're aiming for 70%

Per staff, the CAP tax "was never intended to fully fund the achievement of the city’s climate and energy goals."

"In terms of specific strategies funded by the revenues, the low-cost, low-lift actions have been employed, and the remaining work will be increasingly difficult, more complex, and expensive, and will require the commitment of multi-year, sustained investment to be successful."

The CAP tax as a funding mechanism is outdated, not just inadequate. As mentioned earlier, it's unfair in a couple ways ...

"Boulder’s commercial and industrial sector is responsible for nearly 75% of the community’s energy-related emissions, yet less than 37% of the CAP Tax revenues are collected from them due to the current tiered rates."

And the cost is disproportionately born by lower-income earners: "Because the CAP Tax is a fixed rate per kWh used, regardless of income level, it is considered a regressive tax."

Back to the former point... combined, our commercial and industrial sectors emit just shy of 3/4 of our emissions, but residents are paying roughly 2/3 of the CAP tax.

The UOT tax is a bit more even in terms of revenues/emissions.

With a redone climate tax...
- People already receiving energy assistance should be exempt
- Rebates developed for low-income residents and biz
- Could be applied to total energy bill (natural gas and electricity); CAP Is just electricity

Staff going over some more specific goals under the new climate strategy. They include:
- Planting 20,000 trees by 2030. There is $2.5B in the federal budget for urban reforesting, so some $$ available for that.
- Capturing 50K metric tons of CO2 yearly via the city's land

There are 4-5 key areas of the new climate strategy:
Energy systems
Circular materials
Natural climate solutions
Economic/financial systems and land use

RE: that latter part of that last point (land use) staff notes that could include "the cost of carbon budgeting and other internalize the costs of climate impacts; building and land use codes that account for climate justice and resilience as well as mitigation."

The land use and econ focus were new to the city's climate action strategy, and reflect its shift away from accounting/mitigating for only emissions generated IN Boulder and toward all emissions generated BECAUSE of Boulder.

i.e. If you buy a product from China online and it is shipped to you in Boulder, "your" emissions (and therefore Boulder's) would include the carbon it took to manufacture/create that produce, ship it to you and then dispose of it (eventually).

RE: funding: Wallach asks staff if they considered a sales tax increase for this work

A previous council took that off the table, Jonathan Koehn says.

Wallach: In light of the Marshall Fire, maybe ppl have more urgency to fund climate work.

Wallach: Why did you settle on $5M for a new tax? "In light of the bold actions we have to take, this is being fairly cautious. ... If there's anything this community seems to coalesce around," it is climate change.

Staff did lay out an option for an $8M tax, which would incrase residential bills by $17/year, commercial customers by $225, and industrial customers by $834 (over and above the $5M level)

Koehn: We wanted to acknowledge the inequities in the current tax, and that it's been a v difficult economic time for residents and businesses.

To clarify how much an $8M tax would increase the average annual bill: It would more than triple it for industrial users, more than double it for commercial users and a 42% increase for homes.

Winer disagrees with Wallach: People are already complaining about their utility bills. It's a tough time, and it's refreshing for staff to say they're looking to other sources to raise more $$.

Yates: We often poll the community about proposed taxes. Do we plan that for this one?

Yes, Koehn says. We'd test tax amounts and messaging.

Yates suggesting that a couple qs about the library tax be tacked onto polling for the climate tax. Polling begins in March/April.

Staff does not recommend that, bc the library district is a *regional* effort, and this is city of Boulder only.

Koehn: What we're asking is already fairly complicated. Adding something else into that... Not a fan.

But they'll do it if they have to.

Koehn says staff does not plan or intend to come back in a few years and ask for a tax increase. It's not the smartest or best way to fund this work. We need to pursue other funding sources.

KenCairn: This about how much this work has evolved in 6 years. It doesn't make sense to pin all our work on one revenue source.

Speer clarifying her q, bc perhaps that wasn't it. As we're looking at other funding, I'm wondering what is the timeline for that? Bc someone will be paying it, whether it's property tax or something else.

Koehn: I would suggest doing that in collaboration with the community.

Benjamin: Would it be appropriate to tie linkage fees into climate action? Are you considering using any $$ we might have freed up if the library district passes?

Koehn: We have not considered those.

At least on the linkage fee, Brockett says that is tied directly to the cost of housing and has to fund affordable housing. There would have to be another nexus study to determine the link to climate change (and determine what, if any, $$ could go toward that).

Yates on the proposed climate tax as a whole: "I love this, I'm fully supportive of this" on the ballot this year. "I love that taxes will go down for residents."

"In my mind, there's nothing to hate about this."

FYI, we're on to the portion of the evening where council is giving general feedback on the proposed $5M new climate tax to replace the existing-but-expiring CAP and UOT taxes.

Unanimous support for that tax, which (I forgot to mention) is proposed to run through 2040.

Wallach: "I think the extension of the tax after 2040 makes good sense. Going back to renew taxes that the community will likely support is an expense and I don't think fully required."

That tax will be on this year's ballot.

"A really broad community outreach should be part of that," Brockett says.

Friend: Idk if I'm just being contrarian, but polling at a higher level feels like looking at this in a silo. We know there will be a library tax; social infrastructure is important during climate crises.

"I'm not comfortable saying, 'We love the environment' and tax it up to the heavens," Friend says. We have to consider the whole picture as elected officials.

That's all for the climate tax discussion. Almost done for the night!

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